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Investor News: Trading Update and Notice of Results

November 2019

Social video company Brave Bison (AIM: BBSN) provides a trading and operational update. The Group expects to announce its final results for the year ending 31 December 2019 on 1 April 2020.

Trading Update

The Board announces that, for the year ending 31 December 2019, revenues are expected to be approximately £16 million (2018: £21 million), with an adjusted EBITDA* loss of £0.7 million (2018: £0.8 million gain). These results are significantly below market expectations, driven by the continued impact of adapting to Facebook’s new publishing policies announced earlier this year and a second half shortfall in the Group’s APAC branded content division. Notwithstanding, APAC is still expected to deliver over 100% revenue growth year on year in 2019.

As at 31 October 2019, the Group had £3.8 million in cash and cash equivalents and no overdraft or other borrowings. The Group remains funded, on current expectations, to reach profitability.

*Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, restructuring costs and the share-based payment expense.

Operational Update

As outlined in the 2019 Interim Report, in April 2019, our four largest Facebook pages – VTRND, Bluntly, Supercrafty and Daily Viral Stories – were de-monetised as Facebook stopped serving adverts on these pages.  This was a result of Facebook’s new content policy around exclusive content and editorialisation.  Of these four, only VTRND is still de-monetised and we are continuing to re-brand the page in order to comply with Facebook’s new policy.  It is now clear that it is taking much longer than expected for the pages that were de-monetised to grow their reach and views and the costs of complying with the new content policy have adversely impacted expected margins.

In recognition of our over reliance on Facebook and as part of the re-organisation of the business, we have seen significant revenue growth in other platforms such as Snapchat and YouTube.  Snapchat continues to gain traction, with four series currently commissioned, primarily around our VTRND brand. The strong performance in our YouTube channel management business in the first half of the year is continuing in the second half and its 2019 revenues are expected to be up over 40% year on year. This growth is from a combination of existing clients such as PGA Tour, Tennis Australia and Lev Group and new clients such as US Tennis Association, European Tour and World Chase Tag.

The APAC year on year branded content revenue growth is driven by spend from leading global brands across the region. Headcount has increased to service this larger client base and to source opportunities in South Korea and Japan.

Whilst the Group has had over 30% growth in non-Facebook revenues during the year from APAC, YouTube and Snapchat, these have not offset the Facebook revenue decline. We have therefore reviewed our cost base and have made savings by restructuring our UK Commercial and Creative teams and closed our studio facility.

Kate Burns, Chief Executive Officer, Brave Bison, commented:

“Changes in Facebook’s publisher policy has forced us to build a stronger content creation team and invest in more original production across platforms. These are ultimately positive business decisions as we now own more content IP than ever before. As we move from this investment phase, we will analyse the effectiveness of our publishing strategy based on audience engagement and profitability.“

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